Signal · Cost

Cost-to-income drift

Overheads growing faster than revenue between the two most recent periods — early margin drift worth catching before it shows up in the bank balance.

Cost

What the signal measures

Overheads growing faster than revenue between the two most recent periods — early margin drift worth catching before it shows up in the bank balance.

Why it matters

A small business rarely has a formal budget-vs-actual conversation between the two most recent months. This signal simply compares the rate of change on overheads vs the rate of change on revenue, period-over-period, and flags when the two diverge. It is an early-warning read: catching margin drift before it shows up in the bank balance is far cheaper than catching it after.

How to act on it

The drafted action is a two-minute cost-review prompt — "overheads rose 12% while revenue rose 3%; the top three overhead lines that grew are X, Y, Z". The next step is human — cut, absorb, or price into the next round of quotes.

Worked example — fixture consultancy

On the fixture, software subscription costs jump in the second half of the scan window (Flowstate rising, new SaaS bills) while revenue grows only modestly. Compass computes the drift as a positive signal — the business is losing a couple of margin points quietly and the two-line diagnostic reveals exactly where.